Chris Lombardi puts defense and security under the spotlight, as he shares his takes on recent NATO and EU cooperation and provides insight into the company’s own long-term strategic partnerships in Europe.

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Call for greater flexibility on bank rescue fund

Plans to create a single bank resolution authority and fund took a step forward today (18 February) when European Union finance ministers agreed that they would need to be flexible if they hope to strike a compromise with MEPs before the elections in May.

Greece “has not officially got a new mandate” for negotiations with the European Parliament, said Yannis Stournaras, the country’s finance minister. But Greece, which holds the rotating presidency of the Council of Ministers, had the “approval of the Council to explore certain new ideas for compromise”, he said.

MEPs have warned that they will veto member states’ current proposal for the single resolution mechanism, which would have the power to wind up or rescue stricken banks. It would be the final element in the EU’s planned banking union, which aims to bring eurozone and some non-eurozone banks under a single regulatory system.

The European Parliament is concerned that the member states’ proposal would be too slow to deal with rapidly-unfurling crises and would give politicians too great a role in the decision-making process. The European Central Bank has also raised concerns that the envisaged timeline for creating the single resolution fund was too slow.

Speaking to reporters following the meeting of EU finance ministers, Jeroen Dijsselbloem, the Dutch finance minister, recognised that the question of how to get money into the single resolution fund was one of the main outstanding issues. “There are different options to deal with that one big central issue,” he said. Ministers could make it easier for national funds to borrow among themselves or allow the European fund to borrow against government guarantees, he explained.

Dijsselbloem reiterated that the member states are committed to reaching a deal with MEPs before the elections in May.